The State of the State’s Economy is Sluggish, Brown Administration Reports
The important budget news in the state Department of Finance’s September bulletin isn’t that the California took in $62 million less than expected and is now $654 million below forecast for the fiscal year that began July 1.
Being short revenue is one of many considerations influencing whether spending cuts approved as part of the budget deal in June of up to up to $2.5 billion – more than 75 percent falling on public schools — will be imposed beginning on the first of next year.
“What’s going to be the key indicator is when we complete a new, full-blown economic forecast and see what that translates into,” H. D. Palmer, a spokesman for the department, has said in so many words on many occasions.
And that forecast will cover the entire fiscal year in which the state takes in most of its revenues during the second half.
Among the other factors that will be considered in the department’s forecast is the state of the state’s economy.
“The state’s economic recovery appears to have lost momentum,” the bulletin says starkly in its first sentence. “Job Growth Sputters,” a chart on the front page is titled.
In August, unemployment stood at 12.1 percent statewide — even higher in 33 of California’s 58 counties.
“While an average of 25,000 jobs were gained each month between January and April, an average of 900 jobs were lost each month from May to August,” the bulletin notes.
Nearly 50,000 single and multi-family housing permits have been issued in 2011 — up nearly 21 percent from last year. The state’s high was set in 2004 at 207,400 permits.
Personal income tax collections – a monthw ehre a warterly estimated tax payment is no longer required – were $373 million above the nearly $4 billion expected.
That gain was largely offset by bank and corporation collections being nearly $200 million lower than the $1.1 billion expected.
Filed under: Budget and Economy
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